The Bank of China, one of the largest state-owned banks in China, is currently conducting trials for a novel offline payment system that connects to SIM cards. This payment method is designed specifically for the digital yuan — China’s central bank digital currency (CBDC).
The July 10 announcement revealed the bank’s partnership with telecommunication operators China Telecom and China Unicom, and its intention to commence testing the next day.
The bank plans to enable users to make phone payments by integrating its digital yuan app with specialized “super SIM cards” with near-field communication capabilities. Users simply need to bring their mobile phones near the point of sale terminals for payment, eliminating the need to turn the phone on.
This integration allows transactions to be processed even when the phone is powered off. However, the bank stated that these SIM card payment functions will only be accessible on specific Android phones in a few test regions of China. In January 2022, the People’s Bank of China — the country’s central bank — launched a trial version of the digital yuan app.
This follows China’s recent initiative to expand the use cases for its CBDC as part of its Belt and Road Initiative and cross-border trades, with plans to extend digital yuan usage to pay taxes and utility services in the country.
In the Chinese city of Guanzhou, it is now possible to pay for public bus rides with the digital yuan on 10 transit routes. To do so, passengers simply need to download the digital yuan app, deposit funds and scan the QR code in the bus payment section to pay for their ride.
Related: Chinese city of Jinan accepts CBDC payments for bus rides
Meanwhile, Hong Kong launched an e-HKD pilot program in May after the Hong Kong Monetary Authority (HKMA) released a white paper in October 2021 on a potential retail CBDC. The HKMA, Hong Kong’s de facto central bank, said in a September 2022 consultation paper that it will explore the possibility of cross-border payments linking digital yuan and the e-HKD.
Collect this article as an NFT to preserve this moment in history and show your support for independent journalism in the crypto space.
Magazine: Asia Express: Ripple, Visa join HK CBDC pilot, Huobi accusations, GameFi token up 300%
Be the first to comment